Tax cuts - no longer a monkey on Cullen’s shoulder.
Budget 2008 has seen the tax cut monkey effectively removed from Michael Cullen’s shoulder. The removal, though, has exposed another – the high interest rate monkey.
The high interest monkey was formally placed on Dr Cullen’s shoulder, not by the National Party or any of the other opposition parties in parliament, but by Michael Cullen himself. He placed it there when he said ‘More joy likely in falling interest rates than Budget relief.’ - NZ Herald 16 May 2008.”
The DSC agrees with that but warns that the high interest monkey Dr Cullen now carries will cause more grief than the tax cut issue ever did.
Another quote from Michael Cullen, in the same issue of the New Zealand Herald, actually says it all: ‘If you are sitting, say, in Auckland on a $400,000 mortgage, a 2 percent drop in interest rates is $150, $160 a week or more’. Tax cuts are fine but are of a miniscule benefit to us compared to the gain a low interest rate policy would give.”
Let us all hope that he continues to use his calculator wisely and works out the true cost of interest to the economy. Just as we have food labelling to expose the unhealthy ingredients we eat, we should have labelling that exposes the insidious amount of interest that is hidden in the price of every good or service we purchase or every rate or tax we pay.
If the Finance Minister is sincere in his expressed wish to leave a mark on New Zealand Politics and to be remembered in an even greater way than Michael Joseph Savage, he will have to produce a Budget that will remove one more monkey from, not only his shoulder but from the shoulders of every New Zealander.
The High Interest Rate Monkey must go.
New Zealand's Central Reserve Bank is STATE owned. Despite that, instead of being used for the benefit of its owners, the people of New Zealand, successive Governments have: Allowed the foreign-owned trading banks to create and issue nearly all of the nation's money supply and claim it as their own. Notes and coins make up less than three percent of the money in circulation. Ninety seven percent of our money supply is on loan to us at interest from those banks. Actively encouraged banks to charge "rental" for this money at some of the highest interest rates in the developed world. Used high interest rates as a blunt lever to control inflation, while agreeing to exclude the resultant costs from the Price Index, so that their cost-inflationary effects do not allow pensions and awards to compensate for these. Deliberately used interest rate fluctuations to maintain an unemployed "pool" of about four percent of the workforce in order to hold down wage rates. Fa...
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